In the financial industry, funds are often separated into different accounts wherein each account is a uniquely identifiable construct wherein funds can be segregated from other funds. An account is generally associated with a person or entity and can be used to invest money or to place the money in a relatively safe place. A person or entity may be assigned more than one account such that, for example, the person or entity may be assigned both a regular account and a retirement account with a single brokerage, bank, or other financial entity. Furthermore, the person or entity may be assigned a checking account, a savings account, and a line of credit at a financial institution.
Funds may be placed into an account through the use of “deposits,” wherein deposits may be accomplished in a variety of ways, such as through the use of a check, wire transfer, debit card transaction and/or the like. After finds are placed into an account through the use of a deposit, various actions can be performed on the funds. For example, in an account held in a brokerage, the funds can be used to purchase financial securities, such as stocks and/or bonds. Money may be removed from an account through the use of a “withdrawal,” wherein withdrawals may include a cash withdrawal, money order, cashier's check, wire transfer, domestic transfer, debit card transaction, and/or the like.
A single entity may own multiple accounts, so a “transfer” may occur when money from one account is moved to another account owned by the same entity. Transfers are also possible between accounts with different owners; however, in such a situation, it may be more appropriate to categorize the transfer as a deposit for the receiving party and as a withdrawal for the sending party because the funds are typically no longer available to the sending party.
Certain people may use banks, brokerages, and other financial institutions in an attempt to conceal or commit criminal activities. For example, money laundering is usually the process by which an attempt is made to conceal the origin of ill-gotten funds, through the use of various otherwise legitimate activities. In a typical scenario, illegally obtained funds may be processed through a brokerage account, bank account, or the like in such a way that, by depositing the money into an account and withdrawing it at a later time, the origin of the funds may be more difficult to determine. In addition, a criminal may attempt to use a financial account to commit fraud on various entities. An example of debit card fraud is where one uses stolen debit cards or stolen details of debit cards (e.g., account number, expiration date, etc.) to fund multiple deposits into their account and then withdraws the proceeds via some other mechanism, such as check, domestic transfer, or wire transfer. By tracking the deposit and withdrawal behavior, these types of fraudulent activities can be identified. In general, a person or entity attempting to launder money or otherwise conceal or commit fraud does not transfer money between accounts owned by the same entity, but rather deposits money and later withdraws the money from the same account. Thus, deposits and withdrawals are of great interest to those investigating potential financial fraud.
It is often desirable for financial institutions to monitor accounts in an attempt to detect fraud, money laundering, and other suspicious activities, in order to prevent illegal activities and to aid law enforcement in identifying previous illegal activities.